Page 11 - Poland Outlook 2024

3.0 Real Economy
3.1 Retail
Polish retail sales might have slid 0.3% year on year in November – providing analysts with a negative surprise – but the fundamentals of a recovery in consumption, and thus, effectively, economic growth, remain unchanged.
Fast-growing real wages, the low unemployment rate, and improving consumer sentiment are expected to lift the retail sector from the November lull, with the outlook for 2024 appearing decisively positive.
“In the face of uncertain external conditions, activity should be driven primarily by domestic demand, but its structure will change. While investment strongly boosted GDP growth last year, we believe that consumption will now take on this role,” BNP Paribas said in an analysis.
“We forecast that real household income will grow significantly in 2023, by more than 6%, driven primarily by wage increases in the national economy (+11%), including in the public sector (+20% for the budget sector, +30% for teachers),” BNP Paribas also said.
In our assessment, consumer spending should be largely allocated to services. It seems that after the pandemic, demand for them has not yet fully recovered, and the increase in incomes may encourage households to use them more often.
As for goods, we also expect a rebound in consumption here, but it should primarily concern higher-order goods (e.g., electronics, furniture, home
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